Volvo Scales Up Electric Heavy Trucks As Profits Fund Zero-Emission Shift

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Volvo Group is channeling its strong profitability and European market leadership into the rapid expansion of battery-electric and other zero-emission heavy trucks, positioning electrification at the center of its decarbonization roadmap for long-haul transport, regional distribution, and mining.

During the presentation of the full-year and fourth-quarter results for 2025 last month at Tändstickspalatset in Stockholm, President and CEO Martin Lundstedt said the group’s high returns, cash generation, and scale allow it to accelerate investment in electric vehicles and hydrogen-based transport solutions under its multi-pathway strategy.

Chief Financial Officer Mats Backman told the media and industry analysts present at the conference that it had a net cash position of SEK 63 billion in the industrial operations and a return on capital employed of 25.5 percent, giving the company the financial capacity to expand its zero-emission portfolio while maintaining double-digit operating margins.

The push comes as Volvo retains about a 19 percent share of the European heavy-truck market for a second straight year, providing the production volumes and service revenues needed to support the transition. That scale is now being used to industrialize battery-electric platforms derived from the company’s long-haul architecture.

At the center of the shift is the FH Aero Electric, which Volvo is positioning for regional and intercity logistics. The truck uses a new e-axle that integrates electric motors and transmission at the rear, freeing chassis space for additional batteries and raising installed capacity to 780 kilowatt-hours. Under optimal conditions, the configuration delivers a range of up to 600 kilometers. It is designed to operate with the megawatt charging system for heavy vehicles, which can charge the battery from 20 percent to 80 percent in about 45 minutes, aligning with regulated driver rest periods and allowing electric trucks to be deployed on longer routes without disrupting fleet utilization.

Volvo’s installed base of more than 5,700 battery-electric trucks in 50 countries gives it one of the largest real-world data sets in the heavy-duty segment, shaping vehicle development, charging strategies, and digital fleet services. The growing service business — including connected vehicle monitoring, energy management, and uptime contracts — provides a recurring revenue stream that supports customers shifting to electric operations.

Beyond highway transport, mining and construction are emerging as early large-scale applications for zero-emission heavy vehicles. In cooperation with Swedish mining group Boliden, Volvo FH Electric trucks are operating in the Kankberg underground mine, where the absence of exhaust emissions improves working conditions and significantly reduces the need for energy-intensive ventilation. The trucks recover energy through regenerative braking when descending into the mine and reuse it for the climb back to the surface, making electric drivetrains particularly efficient in steep and confined duty cycles.

For open-pit mining and heavy construction, the FMX Electric is designed to handle high payloads on rough terrain, using the instant torque and precise traction control of electric propulsion to move material in environments that have traditionally depended on large diesel engines. These deployments are seen as stepping stones toward broader electrification of off-road and heavy industrial transport.

Alongside battery-electric vehicles, Volvo is advancing fuel-cell electric trucks for longer distances, where hydrogen can extend range and shorten refueling times while maintaining zero tailpipe emissions. The combination of battery-electric for shorter and regional routes and fuel-cell electric for longer haul is intended to cover the full spectrum of heavy transport as energy infrastructure expands.

The strategy is aligned with Volvo’s target of offering a fossil-free product range by 2040 and reflects a shift from pilot projects to industrial-scale deployment of zero-emission trucks. With a leading position in Europe and a growing global electric fleet, the company is using its current earnings power to fund what Lundstedt described as the most extensive transformation of its heavy transport portfolio.

Backman said operating cash flow of SEK 21.9 billion in 2025 allows the group to maintain a high level of research and development spending despite a normalization in vehicle demand compared with the previous year. That financial strength is enabling the simultaneous rollout of new electric platforms, charging partnerships, and digital services tied to energy use and route optimization.

As this article was being written, the 2025 Annual Report was also revealed. According to the report, the company remained well in the black across all business areas with more efficient vehicles and solutions, even as a cyclical downturn that began in 2024 led to lower volumes for new trucks and machines and geopolitical tensions weighed on the global economy.

“In this period of weaker demand in our key regions and with increased uncertainty about the future, we focused on what we can impact. We adjusted our operations, applied strict cost control, remained firm on our commercial conditions and continued to develop our service business. Thanks to hard work by colleagues across the Volvo Group and at our business partners along the value chain, the underlying performance remained solid. With our fuel-efficient and competitive lineup of products and services across the business areas, we are well-positioned to capture growth in the next cyclical upturn,” said President and CEO Martin Lundstedt.

Net sales reached SEK 479.2 billion, down 3 percent year on year on a currency-adjusted basis due to lower vehicle sales, while the service segment posted solid growth. Adjusted operating income totaled SEK 51.2 billion, with an adjusted operating margin of 10.7 percent, as higher service revenues helped offset the impact of reduced volumes.

“I would like to extend a heartfelt thank you to all colleagues and business partners for yet another year of hard work and dedication to fulfilling our mission of driving prosperity through transport and infrastructure solutions. Together, we contribute to shaping the world we want to live in with economic growth, increased living standards and a sustainable development of society,” Lundstedt said.